Ecolab (NYSE:ECL) executives said the company delivered a record year in 2025 and entered 2026 with “strong momentum,” pointing to continued operating margin expansion, ongoing value-based pricing, and accelerating contributions from its “growth engines,” including Global High Tech, Pest Elimination, Life Sciences, and Ecolab Digital.
Fourth-quarter results highlighted accelerating earnings and margin gains
Chairman and CEO Christophe Beck said 2025 was “another record year” for Ecolab, with record sales, margins, earnings per share, and free cash flow. In the fourth quarter, the company posted 15% adjusted EPS growth, which Beck said was driven by accelerating underlying sales growth and continued operating income (OI) margin expansion.
Ecolab reported 12% organic operating income growth and expanded its organic OI margin 140 basis points to 18.5% in the quarter. Beck said full-year operating income margin was 18%, up 150 basis points versus the prior year, and reiterated confidence in expanding margins “well beyond” 20% over time.
Company outlined 2026 guidance and the building blocks behind it
Looking ahead, management guided to organic sales growth of 3% to 4% in 2026, with growth expected to accelerate as the year progresses, driven by strengthening volume and continued 2% to 3% value pricing. Beck said total reported sales, including the Ovivo acquisition, are expected to grow 7% to 9% in 2026.
On profitability, Ecolab expects OI margin expansion of 100 to 150 basis points to “more than 19%,” resulting in 14% to 16% operating income growth. That framework supports expected EPS growth of 12% to 15%, which Beck said includes a headwind from additional non-cash amortization tied to the Ovivo acquisition.
CFO Scott Kirkland said the margin expansion outlook is “anchored” on two long-term drivers:
- Gross margin expansion of about 75 to 100 basis points annually, supported by value-based pricing, mix, and innovation.
- SG&A leverage of 25 to 50 basis points annually through 2030, supported by productivity and the One Ecolab initiative.
On FX, Kirkland said the company is assuming currency is neutral for 2026, with possible modest favorability in the first half offset by headwinds below operating income, including a higher expected tax rate of 20.5% to 21.5% (up from 20.2% in 2025) and lower “other income” due to pension assumptions.
One Ecolab initiative: expanding customer focus and raising savings targets
Beck said Ecolab aligned global resources around its top 35 global customers, which he described as representing a $3.5 billion growth opportunity. In 2025, he said sales growth with this group outpaced the total company by about 2 percentage points. Management said the company is expanding the same model to large regional customers in 2026.
On cost actions, Beck said Ecolab delivered more than $100 million in SG&A savings by year-end 2025 through global centers of excellence and “agentic AI” applications. He said the company increased its One Ecolab savings goal to $325 million by 2027, up from $225 million previously. Kirkland said roughly $120 million of that total was achieved through 2025, with the remaining about $200 million expected to be realized “equally over the next two years.”
When asked whether further increases were likely, management said the program is benefiting from improved savings momentum, but also emphasized that some AI-enabled opportunities are still developing.
Growth engines and innovation: Global High Tech, Pest, Life Sciences, and Digital
Management repeatedly emphasized that Ecolab’s growth engines now represent about 20% of the portfolio and are expected to collectively grow double digits in 2026, lifting overall growth and supporting margin expansion.
In Global High Tech, Beck described the combined semiconductor fabs and data center-related businesses as roughly $1 billion in annual sales, growing strong double digits at “very high” margins. He said Ecolab is launching direct-to-chip cooling as a service for data centers, integrating its CDU platform with 3D TRASAR real-time monitoring, coolant technology, and on-site service.
On Ovivo, Beck said the acquired business is “roughly” $500 million in sales (slightly less than that), focused 99% on fabs, and growing double digits. He said Ovivo is “mostly technology and much less consumable,” but that the strategic intent is to combine Ovivo’s technology with Ecolab’s model to build a more consumables- and service-driven offering around circular water solutions for microelectronics. Kirkland said Ecolab excluded Ovivo from fourth-quarter results because the deal closed mid-December, which would have added partial-period interest expense with minimal sales, creating “transaction noise.”
Pest Elimination was cited as another major contributor, with Beck describing a $3 billion cross-sale opportunity enabled by One Ecolab selling. He said the company expects to have more than 1 million smart devices in the field in 2026 through its digital-connected Pest Intelligence platform.
In Life Sciences, executives said the business accelerated sales growth during 2025 and discussed ongoing investment. Kirkland noted fourth-quarter OI growth in the segment was low single digits, which he said reflected planned investment and year-over-year comparisons impacted by performance-based compensation. Beck reiterated a long-term operating margin target of 30% for Life Sciences and said an industrial water purification capacity expansion is expected to begin production in the second half of 2026, easing constraints that weighed on 2025.
On Ecolab Digital, Beck said the business reached $400 million in annual sales and grew more than 20% in 2025. He said the digital revenue figure encompasses connected hardware and software, and outlined a “100, 100, 100” vision: 100% of customer locations connected, 100% of applications connected, and 100% billable. Beck said he expects digital growth of “probably 25% in 2026.”
Volume cadence and end-market commentary
On organic volume trends, Beck said 85% of Ecolab’s businesses are performing well, while paper and Basic Industries remain challenged. He expects first-quarter 2026 to look similar to the fourth quarter, with acceleration later in the quarter and through the year as distributor inventory effects normalize and underperforming areas improve.
In water, Beck said the segment grew 2% organically in the fourth quarter, but would have grown 5% excluding pulp and paper. He described water as about half of the company and said the business is positioned to improve as paper and Basic Industries recover. He also said Food & Beverage is benefiting from an approach that combines hygiene and water, which has been implemented in North America and is planned to expand globally.
In Institutional & Specialty, Beck said customer retention remained stable in the low-to-mid 90% range. He attributed the distributor inventory reduction to improved supply chain service levels allowing distributors to carry less inventory, and said the impact should largely normalize in the first quarter.
About Ecolab (NYSE:ECL)
Ecolab, Inc is a global provider of water, hygiene and infection prevention solutions and services. The company develops and supplies cleaning and sanitizing chemicals, dispensing equipment, water-treatment systems, pest elimination services and related technologies designed to help businesses maintain clean, safe and efficient operations. Its offerings span both products and onsite services, often paired with technical support and training.
Ecolab serves a broad range of end markets including hospitality and foodservice, food and beverage processing, healthcare, manufacturing and industrial operations, and energy and utilities.
